What is Credit Card Debt Settlement?
To make sure that we’re all on the same page, credit card debt settlement is when you offer to repay a portion of what you owe on your credit card, typically in a lump sum one-time payment, and the lender agrees to forgive or write off the remaining balance.
For instance, if you owe $15,000 on your credit card, but can only pay $8500, if this is acceptable to the lender (the credit card company) or collection agency, after they agree in writing to your settlement offer, you would pay the $8500 and they would write off the remaining $6500. Writing debt off is a form of debt forgiveness. The credit card account is closed once the settlement is fully processed.
Debt Settlement in Canada – How it Really Works